Tesla Motors Inc (TSLA) May Switch From Panasonic To Samsung For Batteries

Tesla S hero left side
Tesla Motors Inc (NASDAQ:TSLA) is currently in talks with Samsung Electronics for their car batteries.  Tesla Motors has been depending largely on Panasonic for their batteries up until now.

Sales of the Model S sedan are ramping up and Tesla Motors Inc (NASDAQ:TSLA) may likely have to diversify their supplier base to keep up.  The Korea Herald is reporting that Samsung SDI will be the first to offer an alternative to Panasonic.  Samsung already makes batteries for the BMW i3, the Fiat 500e, and various Volkswagen models.

Tesla Motors Inc (NASDAQ:TSLA) is also reportedly in talks with LG Chem and BYD.

Panasonic plans to keep forging ahead with battery production.  The company is currently building two separate facilities at their Osaka Prefecture campus.  Panasonic saw a $41.66 million addition to their bottom line thanks to lithium-ion battery production in the last quarter.

Tesla Motors Inc (NASDAQ:TSLA) and Samsung SDI are currently in the final testing stages before Samsung can sign on-board.  These tests includes the life of the battery, the safety tests, and standard driving tests.  It is possible that Samsung would provide batteries for both the Model S sedan and the future Model X crossover.

Another reason why Tesla Motors Inc (NASDAQ:TSLA) is considering alternative suppliers is because of natural disasters.  When the earthquake Fukushina hit Japan in 2011, Apple supplier Sharp was heavily affected.  This caused a major delay in iPhone distribution.  Tesla Motors Inc (NASDAQ:TSLA) supplier Panasonic is not immune from natural disasters either.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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